(Still) learning from Toyota

24. February 2014

A retired Toyota executive describes how to overcome common management challenges associated with applying lean, and reflects on the ways that Toyota continues to push the boundaries of lean thinking.

February 2014 | byDeryl Sturdevant, McKinsey Quarterly

In the two years since I retired as president and CEO of Canadian Autoparts Toyota (CAPTIN), I’ve had the good fortune to work with many global manufacturers in different industries on challenges related to lean management. Through that exposure, I’ve been struck by how much the Toyota production system has already changed the face of operations and management, and by the energy that companies continue to expend in trying to apply it to their own operations.

Yet I’ve also found that even though companies are currently benefiting from lean, they have largely just scratched the surface, given the benefits they could achieve. What’s more, the goal line itself is moving—and will go on moving—as companies such as Toyota continue to define the cutting edge. Of course, this will come as no surprise for any student of the Toyota production system and should even serve as a challenge. After all, the goal is continuous improvement.

Room to improve

The two pillars of the Toyota way of doing things are kaizen (the philosophy of continuous improvement) and respect and empowerment for people, particularly line workers. Both are absolutely required in order for lean to work. One huge barrier to both goals is complacency. Through my exposure to different manufacturing environments, I’ve been surprised to find that senior managers often feel they’ve been very successful in their efforts to emulate Toyota’s production system—when in fact their progress has been limited.

The reality is that many senior executives—and by extension many organizations—aren’t nearly as self-reflective or objective about evaluating themselves as they should be. A lot of executives have a propensity to talk about the good things they’re doing rather than focus on applying resources to the things that aren’t what they want them to be. Read the rest of this entry »


Driving lean management: An interview with the COO of TD Ameritrade

24. February 2014

Unfortunately, I don’t understand what this has to do with “Lean Management”. This is just purposeful participative management, which is fine, but does not conclude that “lean management” is the success factor. (hfk)

The financial-services group’s Marv Adams explains how ridding organizations of valueless complexity can spur growth.

February 2014, McKinsey Insight

Marv Adams is the chief operating officer (COO) of TD Ameritrade, a leading US provider of electronic discount brokerage and related financial services. The company currently holds more than $524 billion in client accounts and executes an average of nearly 400,000 trades per day.

In his role as COO, Mr. Adams oversees all IT and operations functions, including systems development, data centers and infrastructure, networks, project management and process improvement, and retail brokerage clearing and operations. He has devoted much of his 30-year career to the pursuit of lean management, initially in traditional manufacturing environments and later in financial services. He has been a member of the senior leadership teams at Ford Motor Company, Bank One, Citigroup, Fidelity Brokerage Services, and TIAA-CREF.

art

Marv Adams biography

McKinsey spoke with Mr. Adams at his office in Jersey City, New Jersey.

McKinsey: Across the many operational contexts in which you have worked, what do you find makes lean management so powerful when it is done well?

Marv Adams: Lean management effectively taps into associates’ convictions and passions. They have a deeper sense of when their company is acting in the right way—for the long term, out of a genuine belief in serving clients—versus when it is just reacting to short-term pressures in a never-ending cycle of “flavor of the year.”

Flavor of the year is exhausting. It consumes time and energy without achieving real change. That’s dispiriting for associates and makes it even harder for middle managers to motivate their teams. Everyone is so worn out that when they see a system that says, “We are stewards; it is our responsibility to find a better way to help our clients,” they find it inspiring. When associates can tie their work back to a purpose that’s deeper than just making more money next quarter, the result is a culture in which people are much more satisfied, inspired, productive, and innovative at every level of the organization. So it’s incredibly powerful when it’s done well. Read the rest of this entry »